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Survey: Hospitals cope better as drug shortages persist, but it's costing them $230M a year

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TRENTON, N.J. - U.S. hospitals are coping better with ongoing shortages of hundreds of medications, but a new survey indicates that obtaining drugs from alternate sources is costing them a lot of money they can't spare.

Premier Inc., the hospital group that did the survey, conservatively estimates that cost at $230 million a year for the country's 5,000 hospitals, on average, from 2011 through 2013.

"The total impact is likely much higher," said Mike Alkire, chief operating officer of Premier, an alliance of 2,900 hospitals and nearly 100,000 other health care providers that helps them improve performance and arranges discounted contracts with manufacturers for nearly all the generic drugs they buy.

That's because the $230 million doesn't include costs for many additional staff hours searching for scarce drugs, or having to purchase drugs from manufacturers or wholesalers with whom the hospitals don't have contracts giving discounts. All those costs come out of hospitals' already razor-thin profit margins, because their own contracts with Medicare, Medicaid and private insurers don't allow passing on the higher costs.

Shortages of drugs, particularly cheap, generic injectable drugs, have escalated since 2005. The scarce drugs include the workhorses of hospitals, outpatient surgery centres and cancer clinics: antibiotics, painkillers, anesthesia and sedatives for surgery, chemotherapy and heart drugs. Recently, there's a serious shortage of intravenous fluids and nutrients, including simple saline solution, needed for patients too ill to eat or drink.

The number of new shortages began dipping in 2012, and more hospitals in the survey reported only having to deal with shortages of five or fewer drugs now, as the number of hospitals grappling with six or more drug shortages is declining. But many shortages persist for years, so the total keeps climbing.

Still, hospitals have been adapting, using strategies from frequent communications on shortages and adding backup inventory to rationing some scarce drugs and implementing safety measures for alternative medicine choices to prevent errors.

That hasn't stopped them all. The Premier survey in December and January found that 90 per cent of the 124 hospital pharmacies responding had dealt with at least one drug shortage in the prior six months that might have caused an error in patient care — barely down from 91.4 per cent in a similar survey in 2010.

In 2011, The Associated Press documented at least 15 patient deaths over the prior year due to mistakes from having to use an unfamiliar substitute treatment.

And in a report earlier this month on the problem, the U.S. Government Accountability Office wrote, "From prolonged duration of a disease, to permanent injury, to death, drug shortages have led to harmful patient outcomes."

Causes of the shortages include manufacturing quality problems, such as bacterial contamination and particles in vials of liquid medicine, that have resulted in medicine recalls and shutdowns of manufacturing lines and even entire medicine factories. Because profit margins on generic injectable drugs are so low, there are only a handful of manufacturers making them, so when one stops producing a drug, often there isn't enough capacity in the system to compensate.

In the last couple of years, the Food and Drug Administration set up a unit focused on preventing and resolving drugs shortages. It works with other manufacturers and occasionally approves overseas manufacturers who can supply drugs that are scarce or unavailable.

Premier has been helping members find additional suppliers, and one company, Heritage Pharmaceuticals of Edison, N.J., has started making some of the scarce generics.

Those efforts and others have decreased the number of new drug shortages, which peaked at 255 in 2011, according to the February GAO report, which said the FDA needs to do more to anticipate and prevent shortages.

There were only 73 new shortages in the first half of last year, according to the GAO, but that was on top of 288 shortages of medication that began in prior years —the highest number of ongoing shortages to date.

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Follow Linda A. Johnson at http://twitter.com/LindaJ_onPharma

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